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Roger Clarke's Fundamentals of Negotiation

Fundamentals of Negotiation

Roger Clarke

Principal, Xamax Consultancy Pty Ltd, Canberra

Visiting Fellow, Department of Computer Science, Australian National University

Version of 9 October 1993

© Xamax Consultancy Pty Ltd, 1993

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Negotiation is a process involving dealings among persons, which are intended to result in an agreement, and commitment to a course of action.

Negotiation may be:

Negotiation comprises a series of communications between or among the parties. These may occur in one or more:

Each of the parties who participate in negotiation may be a principal, or an agent for a human principal or for a legal entity such as a corporation.

Negotiation may be straightforward and quick, if the wishes of all parties are satisfied by the first proposal put by one of them.

Where the wishes of all parties are not satisfied by the first proposal, discussions are likely to lead to variations to it, or the creation of counter-proposals. This process will generally be quicker if the parties provide information to one another about their wishes.

In some cases, it is possible for a proposal to be generated which satisfies the needs of all parties. This is commonly referred to as a collaborative process leading to a 'win-win' situation.

In other circumstances, one or more parties may have to accept less than they wished for when they entered the negotiation, i.e. to compromise their objectives in the interests of reaching an agreement. Such an environment involves some degree of competition among the parties.

In some circumstances, the fulfilment of the wishes of one party may be directly detrimental to the fulfilment of the wishes of another party, e.g. in bargaining over the price of goods or services. This is referred to as a 'win-lose' situation (in the language of salesmen), or a 'zero-sum game' (in the context of operations research and game theory).

During negotiations, the parties may reach a 'stand-off', whereby no commonly acceptable point along a single dimension (such as price) can be found, or a 'dead-lock', whereby the parties' demands on one another are mutually unacceptable along several different dimensions.

Pre-Conditions for a Successful Negotiation

Major Factors in Negotiation Strategy

Power, i.e. the ability to exercise control



Conflict Management Approaches

This is what to do when the party gets rough ...

Key Factors which Influence the Course of a Negotiation

Negotiation Strategies

Always commence collaboratively, in order to avoid missing a simple but advantageous solution, and to build up the other parties' investment in the proceedings

In a win-win situation, continue to use consensus and collaboration

In a win-lose situation, where other parties have the upper hand, look for opportunities to avoid or defer the proceedings, or at least to convince the other parties that you can do without a result for the moment

In a win-lose situation, where you have the upper hand, choose between:

Which is appropriate depends primarily on the urgency to you of achieving a result, and the anticipated longevity of your relationships with the other parties

Some Key Negotiation Tactics

Clearly distinguish between:

Avoid making unilateral concessions

Sustain credibility through consistent behaviour and signals

Record key information which arises during the negotiation

Don't use an Ultimatum until and unless the following Pre-Conditions exist:

Document the outcomes by way of a Minute, an Agreement, a Contract, or a Memorandum of Understanding among the parties

Characteristics of a Successful Negotiator
Personal Knowledge

Personal Skills

Commencing Position

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From the site's beginnings in August 1994 until February 2009, the infrastructure was provided by the Australian National University. During that time, the site accumulated close to 30 million hits. It passed 65 million in early 2021.

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Created: 26 June 1998 - Last Amended: 26 June 1998 by Roger Clarke - Site Last Verified: 15 February 2009
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